JPMorgan Chase creates own Cryptocurrency

JPMorgan Chase is the first major US bank to create its own cryptocurrency.

The bank, which moves more than $6 trillion around the world every day, has created the “JPM Coin,” a digital token that will be used to instantly settle transactions between clients of its wholesale payments business.

JPMorgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, move to the blockchain, the database technology made famous by its first application, bitcoin.

But in order for that future to happen, the bank needed a way to transfer money at the dizzying speed that those smart contracts closed, rather than relying on old technology like wire transfers.

While the bank’s CEO Jamie Dimon notoriously bashed bitcoin as a “fraud” a year ago, he and his managers have consistently said blockchain and regulated digital currencies held promise.

Each JPM Coin is redeemable for a single U.S. dollar, so its value shouldn’t fluctuate, similar in concept to so-called stablecoins.

Clients will be issued the coins after depositing dollars at the bank; after using the tokens for a payment or security purchase on the blockchain, the bank destroys the coins and gives clients back a commensurate number of dollars.

June Okal is a Technology, Media and Telecommunications lawyer. She serves as co-organizer of Nairobi Legal Hackers and blogs for Techweez, a leading technology news digital media platform, and is a fellow of the Internet Society (ISOC), Internet Corporation for Assigned Names and Numbers (ICANN) and the Equity African Leadership Programme (EALP).

About Nairobi Legal Hackers

NBO Legal Hackers is the Kenyan Chapter of a robust and fast – growing movement of legal hackers in Africa. The Chapter was the first African Chapter of the Legal Hackers Community and has been instrumental in the growth of the community in the region.

A legal hacker is someone who cares about the intersection of law and technology and seeks to improve legal practice through technology while simultaneously using legal skills to promote technological innovation and exploration.